Business Environment may be define as all external and internal factors which affects the activities of business. In these factors we can include customers, suppliers, and employees, Govt., Economy and Competitors.

Explanation of Business Environment

We can explain business environment with physical environment of nature . When we see nature , we find many things air , water , sun , moon and so many other things . They create environment . Nature is effected from these factors from time to time and shows his presentation in the form of raining , season and other variations . Same thing happens in business . Business is also affected from its environment . Suppose , If Govt. increases service tax rate or VAT rate . At this time , business has also to increase the price of his products . There is not just a single factor are affecting business but large number of factors affect business .So , see the behaviour of different factors is necessity of time for operating business smooth in this environment .